Consumer spending dips in July

Merchants throughout Southwest Florida and statewide were pinched by a late summer lull in consumer spending, with gross sales slipping to their lowest levels of 2013 during July.

But shoppers continued to open their wallets with greater confidence than any other time since the onset of the Great Recession, with spending through the first seven months of the year still on track to outperform 2012.

The biggest gains have come with business that have benefited from a resurgence in tourism and the housing industries — two sectors that have led the region's recovery.

But with Congress in a gridlock, retailers bracing for uncertainty in the new health care law and job growth that has failed to meet expectations, some economists worry that spending could taper off as the calendar turns to the crucial fourth-quarter.

"The trajectory this recovery is on is going to be subpar," said Sean Snaith, an economist with the University of Central Florida. "The labor market seems to be limping along, and there's just too much weighing down on consumers — too much uncertainty."

Retailers in Sarasota, Manatee and Charlotte counties combined to register $1.97 billion in gross sales in July, the latest figures available from the Florida Department of Revenue.

That was down 11 percent from June and represented the lowest monthly sales mark of the year.

But sales totals were up 8 percent from July 2012 and 12 percent ahead of the same time in 2011, the records show.

Sarasota County led the way regionally, with the strongest increases over the year. Consumers in the county spent $921.7 million in July, a 10 percent drop from June but still 9 percent ahead of the same month a year ago.

The $767.5 million in gross sales in Manatee County in July were up 7 percent over the year, while the $277.8 million in Charlotte swelled 6 percent annually.

Through seven months, the $15.32 billion in gross sales collected between the three counties remain 5 percent above the pace last year, and 13 percent on top of 2011.

Consumer spending is considered one of the best indicators to measure the health of the economy because it represents more than two-thirds of all economic activity, analysts note.

During a positive business cycle, gross sales will usually climb at a pace of 2 percent to 5 percent each year to keep pace with inflation, population growth and still leave room for some true spending increases.

Most of Southwest Florida now hovers right at that level.

"The bottom line is we will be ahead of 2012," Snaith said. "But there's still a lot of unanswered questions."

The bulk of local spending increases have come with ancillary businesses in the tourism and housing industries — from clothing stores to furniture retailers and hoteliers. There also has been a pent-up demand boosting sales for automotive dealers.

Some of the industries that were down from a year ago include manufacturing, and perhaps surprisingly, building contractors.

In all, gross sales in July more than doubled the gains from the first quarter and also topped the second quarter of 2013, when the region's sales rose 6.7 percent over last year. The local improvements also have been more robust than the state's recovery as a whole.

Across Florida, the $71.82 billion in gross sales in July was off 21 percent from June. But like the local trend, it rose a modest 2 percent from July 2012 and 11 percent from the same time two years ago, according to the state.

Retailers attribute the down month largely to seasonality, with spending during the summer typically tapering some each year. They also project many shoppers in July were putting off back-to-school purchases until the sales tax holiday in early August.

"I expect there will be a little bit of a bump next month from that," said John Fleming, spokesman for the Florida Retail Federation. "Up until this point, we have been having a solid year."

Fleming now fears the standoff in Washington, D.C., and new health care changes could filter through to consumer spending decisions.

The Department of Revenue figures are taken from monthly sales tax reports, which break down transactions by more than 80 industries for Florida's 67 counties. There is typically a three-month lag from the time the sales are recorded at businesses to their release by the state.

"July was a good month for both of our divisions," said spokesman Bill Webster. "If it's the right item, consumers are confident. But it has to be new and it must have a good price to stimulate consumers these days."

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